Of course the really damning thing is that just about everyone did anticipate this moment. That cartoon is from March of 2007. The yield curve on US treasuries has been predicting a stock market crash for at least the last 15 months. Thursday and Friday we began to see the first evidence of the “correction.” I’m sure that the market has farther to fall before it bottoms out. I’ve been reading about the “housing bubble” for two years or more. I used to live in the SF Bay Area, so perhaps I’m more sensitive to this than the rest of the country, but the point is sound: when you’re on a 2-year ARM loan and your mortgage “re-prices” itself after two years, your surprise is not convincing.
Likewise, when Bear Stearns loses ten billion dollars’ worth of their investors’ money in a matter of weeks because they gambled it all on the unlikely chance that all of those losers with sub-prime loans would actually make their payments, they have no one to blame but themselves.
And sure it sucks to lose your house. But that doesn’t mean you get to act surprised about it when it happens.